Toll Road Revolt in South Africa

In Gauteng Province (South Africa) an ambitious and expensive toll road scheme has been put on indefinite hold 2-days before its launch due to popular, trade union, business leader, and Automobile Association protest according to The Economist (It doesn’t toll for thee 2012.05.12). This will have significant financial repercussions for the road authority and the government. In easy hindsight, there is little surprise this happened.

Road operators are in desperate need for funding the world over.  And roads get more congested every day. But installing a one-size-fits-all tolling system on a pre-existing road network does not go down easily. However necessary for any number of reasons, this indeed “represents the state’s bullying power” as The Economist bluntly put it.

Image from article in The Economist. Copyright:The Economist

Adding new lanes and tolling them as high-occupancy/toll (HOT) lanes for discretionary use meets little resistance. But tolling major routes that have few or diminished alternatives would generally be received poorly. People who have had free access to roadways for as long as they remember, expect free access to remain available as long as they live. In behavioral economics lingo, they are “anchored” to a road-price of zero. You can’t just start charging US 12 cents per mile on a Monday at 12:01am, which is what was to happen in Gauteng.

To have acceptance, you have to make the individuals subject to tolling better off than they were without tolling. Drivers don’t buy into tedious economic arguments about highway funding and congestion and pricing and the tragedy of the commons. They ask: “What’s in it for me?”

Here is an alternative.

Phase in gradual fuel duty increases over a few years expressly to pay for new or repaired roads. Preannounce the full plan to give users time to adjust (move, renegotiate contracts, different vehicle, etc.). This will be difficult enough.

Concurrently provide a voluntary choice: pay the newly increased fuel tax or use an autonomous, in-vehicle, time-and-place of use meter to trade road tolls for a fuel tax rebate (calculated by the same meter). Arrange the road prices (stored in the personal in-vehicle meter’s “pricemap”) to have drivers who avoid congestion save money with the meter and other drivers to pay about the same as the fuel tax. Then be sure that the smart in-vehicle meter offers several additional features that those self-selected drivers would like (reduced insurance premiums, parking conveniences and discounts, etc).  The trick is (again according to behavioral economists) to provide at least twice the perceived value to the driver than the perceived cost (nuisance, money, trouble) of using the meter. This is technically easy to do (including privacy, security and reliability), but needs policy that encourages usage-based insurance and permits wireless parking management and perhaps behavioral rewards for safety, emissions, and the like. Without associated value-added services and incentives with benefits that counterbalance this type of increasingly needed tolling, governments are not offering a vote-worthy solution.

What we are missing are policies to incent innovation and permit voluntary migration. We need a telemetrics-payment ecosystem that allows driver services to move metering away from one-size-fits-all gantries for users with a variety of needs.

Dutch Rewarding Drivers to Drive Off-peak

Is it possible that we don't need so many new roads as we think? Likely. Is it possible to manage congestion without tolling every road? Possibly not, but there is a way to put it off until “the next administration”, while still addressing congestion. So think the Dutch—those masters of nationwide road tolling ideas.

This article from a Dutch Newspaper was translated by Google, then edited for readability. The original is here.

Could even be our city, eh?

With rewards, 3,000 fewer cars during Utrecht rush-hour

2012 04 12 

Since the start of the project Spits Free in the triangle Utrecht - Amersfoort - Hilversum driving during peak hours about 3,000 cars fewer are using the road in that area. Participants will receive a reward if they avoid morning or evening peak.

The deputy with responsibility for this is Remco van Lunteren from Utrecht. The project is now six months in the Utrecht region and according to van Lunteren, it is a success. In four weeks, participants drive 1.5 million fewer miles during rush hour, says the province.
In the region, 60,000 people drive daily during peak hours. The project involves about 5,400 motorists. There is a waiting list to participate.

The county calculates that spitsmijders ‘earn’ an average of about 30 euros per month to drive at other times. Participants especially avoid the rush hours on Tuesday and Wednesday. 

The province of Utrecht recently calculated the socio-economic impact of the project. It is noted that a few less cars on busy roads during rush hour already provide for the resolution of a file (the congestion file? ed.). In some places, the road is never silent, says the province. Spits runs freely until the end of this year.

While most governments may not be willing to hand out cash for drivers to use roads at different times (and I don’t think they should), there are many other direct, economic ways to reward such behavior, outlined in numerous other blogs, here. The point is that drivers respond to economic incentives, by shifting travel time (or mode). And there are many cash-equivalent economic incentives that are cost neutral to the taxpayer.

We should start looking at them.

Edward Glaeser’s Triumph of the City

Edward Glaeser’s 2011 book, Triumph of the City: How our Greatest Invention Make Is Richer, Smarter, Greener, Healthier, and Happier, is a worthy read. In the middle of a chapter called, “How Were the Tenements Tamed” is a gem about congestion.  I copy it here without permission and in the spirit of sharing a beautiful piece of writing that is among the clearest I have read in a decade of dedicated reading about traffic and congestion. Tim Harford, another economist I admire wrote a brilliant passage that I cribbed as well (that time with permission!).

As you will see, Glaeser’s urban view is about much more than congestion, so I left his context intact.

More Roads, Less Traffic?
Contagious diseases turn the great urban advantage—connecting people—into a cause of death. Traffic congestion eliminates that advantage altogether by making it too hard to get around in a city. Too much trash turns city streets into a health hazard; too many drivers turn city streets into a parking lot. Providing clean water requires an engineering solution, but providing uncongested streets requires more than just technical know-how. Our streets only become usable when people don’t overuse them, and that calls for the tools of the economist. Driving creates a negative externality, because each driver typically considers only his own private costs and benefits. Drivers don’t usually take into account the fact that their driving slows everyone else down. The best way to fix that externality is to charge people for using roads.

Moving water into cities and sewage out was a vast undertaking, which tested the very limits of engineering know-how. Traffic congestion is also an engineering challenge but a psychological one as well, mainly because each improvement changes drivers’ behaviors in a way that actually offsets the improvement. For decades, we’ve tried to solve the problem of too many cars on too few lanes by building more roads, but each new highway or bridge then attracts more traffic. Economists Gilles Duranton and Matthew Turner have found that vehicle miles traveled increases essentially one-to-one with the number of miles of new highway, and have called this phenomenon the fundamental law of road congestion. 

The traffic problem essentially reflects the impossibility of sating the demand for anything that’s free. Roads are expensive to build and valuable to use, yet American motorists seem to think that a right to drive for free was promised them by the Bill of Rights. Soviet Russia used to charge artificially low prices for consumer goods, and the result was empty shelves and long lines. That is basically what happens when people are allowed to drive on city streets for free.

The best way to reduce traffic congestion was dreamed up by a Nobel Prize-winning Canadian-born economist, William Vickrey. Vickrey first pondered the puzzles of public transportation when, in 1951, he joined a mayor’s committee to improve New York’s finances. He was assigned the problem of pricing subways, and he noted that “users of private cars and taxis, and perhaps also of buses, do not, by and large, bear costs commensurate with the increment of costs that their use imposes.” When we drive, we consider the private costs to ourselves of the time, gas, and automobile depreciation, but we don’t usually consider the costs—the lost time—we impose on every other driver. We don’t consider the congestion we create, and as a result, we overuse the highways. 

The natural economists’ solution to this problem is to charge drivers for the full cost of their commute—which means adding a fee that charges drivers for the impact that their car imposes on the rest of the road. Vickrey followed up his core insight in the late 1950s in a report on the Washington, D.C., bus system, in which he first advocated charging driven for the congestion they create. Vickrey’s insight, inspired by the city around him, is another example of self-protecting urban innovation. Decades before E-ZPass Vickrey recommended an electronic system for imposing these congestion charges, and he suggested that charges rise during rush hours, when congestion is worse. 

Decades of experience have proven Vickrey right. Building more roads almost never eliminates traffic delays, but congestion pricing does. In 1975, Singapore adopted a simple form of congestion pricing charging motorists more for driving in the central city. Now the system is electronic and sophisticated and keeps that city traffic-jam free. In 2003, London adopted its own congestion charge and also saw traffic drop significantly. 

So why is congestion pricing so rare in the United States? Because politics trumps economics. Imposing a new fee on thousands of motorists is unpopular, and as a result, millions of hours of valuable time are needlessly lost by drivers stalled in traffic. Vickrey himself died of a heart attack, slumped over the wheel of his car, traveling late at night. I’ve always imagined that he was driving at that hour to avoid congestion. 

In America, congestion wastes billions of dollars’ worth of lost time, but its consequences can seem even more severe in the cities of the developing world, where crowding is more extreme and where alternative traffic options, like subways, are typically underdeveloped. Buildings are shorter and consequently more spread out, and that, along with terrible sidewalks, makes to pedestrian option less practical. In cities like Mumbai, congestion can bring the business of urban life to a standstill, which is why fighting congestion is not about convenience; it is a fight to ensure that the city can fulfill its most basic function of bringing people together. 

[Emphasis mine.]

The Evolution of the Cooperative Vehicle

Cooperative Vehicle Highway Systems focus on sensors, telemetrics, intelligent driver override, roadside computation, telecommunications, emergency technologies and so on. The stress is on technological solutions that address a problem with a large social and human component—e.g., human safety, congestion, efficiency, and reliable automobility.

CVHS’ goals form a virtuous circle: reduce accident counts and severity and improve the performance and efficiency of existing transportation infrastructure while reducing fuel use, emissions, and congestion. These are a lot of wins.

In general, when thinking about CVHS, we see two components: vehicle and roadside infrastructure. Also key are intelligent communications between car and roadside, many-to-many pair-wise communications between proximate cars, and of course communication among all of these and the cloud. But there is another critical and elusive component—the driver. I’ll return to this.

CVHS is highly related to the Connected Vehicle, and sometimes the distinction get blurred in discussion. I see them as two adjacent phases on a continuum as we equip vehicles, roadways, and communication networks for the Connected Age of Automobility already underway. The Cooperative Vehicle is focused on safety and driver assistance including driver override, while the Connected Vehicle is focused more on driver information and trip assistance, including infotainment and payment services. But, a portion of the enabling fabric can be shared.

A key distinction is that many Cooperative functions involve intrusive control—generally braking and steering—when the driver is perhaps distracted or not responding appropriately. Meanwhile, some Connected functions have the potential to contribute to the distraction problem that is one of the motivators for the Cooperative functions in the first place.

All of  this makes the human a mystery component. Will the net benefit make us safer? Will automation make our species’ driving skills atrophy? Will anyone be able to parallel park in 30 years?

A well-reported phenomena called risk compensation tells us that drivers tend to invest a perceived increment in safety by driving a bit faster or a bit more aggressively. Humans seem to have a risk budget they are eager to spend. The problem is more than 50% of the people in accidents are victims. If you count all immediate family members to people actually in the cars the percentage of innocents is much higher.

Surely, if one begins to trust that their vehicle can handle breaking and steering, the use of infotainment systems and gadgets (Connected or not) will be perceived as safer. And that may not be a problem in most cases—we hope. But how good does Cooperative technology have to be before Connected technology will not make us less safe?

There are liability reasons ensuring that Cooperative technology will likely never by installed as an aftermarket upgrade, unless by the original manufacturer. And there will clearly be resistance to letting the car “take control” from a driver. Could aftermarket warning systems that beep rather than brake or whistle rather than steer, be the way to erode that resistance? Could aftermarket Connected Vehicle platforms be the Trojan Horse to get fledgling Cooperative Vehicle functionality past first base? I think so.

We also know from experience that mandatory safety equipment requires user acceptance, which in turn implies slow introduction and consumer-led market penetration prior to mandate. This may be the best reason that aftermarket Connected Vehicle technology that has at least some Cooperative-like functions will the best accelerator to Cooperative Vehicle evolution.

One Hour Free Parking Could be Worth Millions to Toronto

Toronto needs a few things related to transportation. It needs more mass transit—either subway or light rail—I won’t choose sides. Toronto appears to need more parking judging by the fact that there is seldom a spot available when you want one. Or maybe it needs a different kind of parking management, because there are usually enough parking spaces in most circumstances, but they are priced to have some areas 100% full and cars waiting to take a spot and nearby areas nearly empty when they could be making money for the city.


And Toronto needs more money.

Now before you set this aside in disgust at the idea of more parking in a world that is already flooded with cars, many already parked, and the rest circling around the block looking for a spot, consider that there are not enough parking spaces in some areas because they are priced wrong and there are empty spots nearby, because they are signed wrong. I assert that if we could address this, there would suddenly be plenty of parking without creating any new parking spots or lots or garages—and Toronto could take a big bite out of its deficit.

My first target is One Hour Free Parking. There is far more of it than we use, and it could be sold if only we could manage it.

Not long ago, I decided to park my car near the Greenwood subway station and take the train downtown to a meeting. Since I might be longer than 3 hours, I decided not to risk using the pay-and-display meters on the main street, Danforth, so I drove to the next street north. One-hour parking. And the next one, too. So I went up one more and finally ended up parking about 0.5 km away from the station. Because I had cruised back and forth looking for free parking I had essentially driven an extra 1.5 km while passing well over a hundred, empty, one-hour-free spaces. I figured I needed to park about three hours and did not wish to risk a $30 citation. But, I got my free spot!

I would have been happy to pay for parking by the hour, one or two streets off of the main drag, as long as I would not be ticketed if I returned a bit later than planned. If it was a bit cheaper, as well, I’d be happier yet.

“So what”, you might think. “Go find a GreenP lot along the Danforth to use.” I could have done that, but the two nearby lots were installed just after this. (And think of the expense to the city of keeping precious corner parking lots on main thoroughfares which could be sold and developed into commercial or residential property that generated tax revenue while all of the empty one hour free parking could used to store parked (and paying!) vehicles do not. The City is paying a huge and double cost to provide undersubscribed One Hour Free Parking. Millions every year, I’d say.

One hour free parking has two other problems. The first is that it is very expensive to enforce. A parking officer has to pass by twice to confirm that someone is overstaying, that means that since one hour free parking is not much in demand, enforcement revenue is sporadic and will produce little or no net income for the city compared to the enforcement income available from meter violations from the pay-and-display machines on the heavily used main drag. The second problem is, because one-hour free parking is used on streets where there is somewhat less demand so that the city can hardly afford to use costly pay-and-display machines there, since revenue per machine would be very low.

There is another solution and that is to manage on street parking in these marginal areas where enforcement is expensive and where most people need more than one hour anyway with wireless in-car parking meters that hold all the pricing rules and payment instructions internally (to keep your location 100% private). These automatically detect parking in payable areas and generate a parking bill for monthly payment. This means Toronto could allow participating motorists to pay a little less (but not free) to park a block or two away from the major streets that use pay-and-display machines. Since these spots are away from the commercial retail storefronts, cars could park there longer then the current time limit, although they would continue to pay for the duration of their stay. Toronto could even grandfather one hour free parking for the first year or two, since many people will feel it reasonable that someone willing to walk a block or two be able to park free for a few minutes to run an errand. I disagree, but that hardly matters. Such a system with its pricing rules buried inside like a smartphone app is remarkably flexible.

And some of the money could be used for mass transit, and some of it could be used for local improvement of the streets in those residential areas.

But the most important part is that having a place to park is something motorists want. In fact, the four most important things for motorists, as shown in parking studies, are, in order: (1) finding a parking place easily, (2) not getting a ticket, (3) having a convenient way to pay, and (4) cost. The scheme I describe satisfies all four, and would make motorists very happy.  Hence this scheme, in Mayor Ford’s parlance, helps relieve the “war on cars”—all while helping with Toronto’s deficit.

What’s important about this is that it is neither pro- nor anti-car and that is because I am neither pro- nor anti-car. What I am observing is that the parking spaces that we do have are simply not well deployed they are underpriced in some places causing them to be over demanded. And right beside those places are unusable spots that could be slightly less in price so the net of it is that drivers could be happier, the city could have more money, and cars reduce circling around so that emissions are reduced. Best of all, this scheme requires no change in current rules—it can be entirely voluntary. Any driver not interested in parking this way can simply park as they do now. Refuseniks would be better off, because there would now be more spaces in the pay-and-display areas, while their bolder brethren are better off saving a buck by parking a block or two away. It is also the case that it is much easier to spot check a vehicle using this technology then it is to use the “tire marking” methods needed to enforce one hour free parking. This is a win win win win win scheme. It can’t get much better than that.

Or can it?

It turns out that the same technology can be used anywhere—curbside, lot, or garage. And that means that we can introduce graduated parking on street. Graduated parking means that instead of getting a ticket for staying past a time limit, the parking fee simply escalates slightly. This encourages turnover, gives the city money for every minute over the limit, reduces the need for enforcement and its attendant costs, and makes the entire experience of parking much more pleasant.

And if you do not like cars, look at it this way: if others are going to use cars anyway it makes sense to charge properly for parking, to reduce the number of cars that are circling around looking for parking, and to reduce the cost of enforcement. I estimate that the current city parking enforcement team in any city can manage 2 to 4 times more parking spots with this new technology. That means that we can have much more sensible parking policies without any layoffs and without new hires. Altogether I estimate that over a five-to seven year period it is possible to put two to four times the number of parking spots under this kind of “pay-as-you-park” management (any form of parking can be managed this way) and that this can be managed with the same staff complement. That would mean that we could at least quadruple net income from parking to our city. Since much of that comes from efficiencies, the burden on drivers is very small compared to the convenience and timesaving in finding a parking spot. Win win win win win.

The war on cars, 1970

Eric Fischer comments on this ad for Motorists United, from Car Life, July, 1970: “It's…[a]lso interesting that their anxieties were all about regulation of the vehicles themselves rather than allocation of street space or availability of parking.”

Rifling through the online comments on most newspaper articles today, nearly 42 years later, about congestion pricing, nothing has changed. “...anxieties are all about the evil government tracking monster rather than allocation of street space or availability of parking.” Sanity be damned. F-R-E-E-D-O-M!

Does Peak Car mean Peak Road?

In a recent online discussion group about congestion I posted this question:

In the face of US reports of plateauing VMT and the increase in the average age of our automobile fleet, it would seem that the demand for new lane miles would be easing. Does anyone know if this is happening? Or is the lag in demand too long to test this effect, yet? Or is the pent up demand too great for an effect to be visible. Where can I go for such data?

Another participant, Todd Litman of the Victoria Transportation Institute, provided an insightful reply that is worth sharing (with permission):

That's an interesting question, Bern. There is a growing discussion among transport planners, particularly those involved in strategic planning, about the implications of peaking VMT. During the last century, vehicle ownership and travel grew steadily so it made sense to invest significant resources to expanding roads and parking supply; there was little doubt that additional capacity would be needed, it was simply a question of how soon. The main indicator used to evaluate transport system performance, roadway level-of- service, only reflects inadequate roadway supply. Transport models that extrapolated past trends into the future were used to predict that roadways would experience "gridlock" without future expansion. 

But per capita vehicle travel peaked in most developed countries about the year 2000, and total U.S. VMT peaked about 2007. This results from structural trends including aging population, rising fuel prices, improvements to alternative modes, increased urbanization, increasing health and environmental concerns, and changing consumer preferences. The research cited below indicates that in developed countries, motor vehicle travel is unlikely to grow much overall in the future; there may be modest increases in VMT in areas with significant population or industrial growth but most areas will see traffic volumes hold steady or decline in the future. 

This has important implications for transport policy and planning. It indicates that traffic and parking congestion will be less important problems to address than in the past, while demand for alternatives (walking, cycling, public transit, telework and delivery services) will increase. Congestion is a problem in many urban areas, but it is unlikely to get much worse, and it is just one of many transport problems, so congestion reduction is no longer the dominant transport planning objectives. In response to the combination of these changing demands, aging roadway infrastructure and declining fuel tax revenues, transport agencies are placing more emphasis on system maintenance, operations and modal diversity, and less on system expansion.

For more information see:

Phil Goodwin (2011), "Peak Car: Evidence Indicates That Private Car Use May Have Peaked And Be On The Decline," Urban Intelligence Network (www.rudi.net/node/22123 ).

Todd Litman (2005), “Changing Travel Demand: Implications for Transport Planning,” ITE Journal, Vol. 76, No. 9, September, pp. 27-33; at www.vtpi.org/future.pdf.

Todd Litman (2012), “Optimal Transport Policy For An Uncertain Future” at http://www.planetizen.com/node/54215
David Metz (2010), “Saturation of Demand for Daily Travel,” Transport Reviews, Vol. 30, Is. 5, pp. 659 – 674; summary at www.ucl.ac.uk/news/news- articles/1006/10060306 and www.eutransportghg2050.eu/cms/assets/Metz- Brussels-2-10.pdf.

Adam Millard-Ball and Lee Schipper (2010), “Are We Reaching Peak Travel? Trends in Passenger Transport in Eight Industrialized Countries,” Transport Reviews, Vol. 30 (http://dx.doi.org/10.1080/01441647.2010.518291).

Steven E. Polzin, Xuehao Chu and Nancy McGuckin (2011), "Exploring Changing Travel Trends, presented at Using National Household Travel Survey Data for Transportation Decision Making," Transportation Research Board; at http://onlinepubs.trb.org/onlinepubs/conferences/2011/NHTS1/Polzin2.pdf.

Clark Williams-Derry (2011), "Dude, Where Are My Cars?", Sightline Institute (www.sightline.org); at http://daily.sightline.org/blog_series/dude-where-are- my-cars.

Maybe it is good that neither the US nor Canada can fix the fuel tax

I write here a lot about the need to shift from fuel-tax to a pay-as-you go road-use fees. A lot of people write about this.  Recently Jack Opiola wrote some more in ITSI (“Evidence buildingfor distance-based charging”). 

Opiola’s point is that we could increase acceptability by giving drivers 2 or 3 choices of methods to pay for road use rather than encourage hostility by mandating a single technology, namely GPS. He goes one further by saying: “the market place would supply the necessary technology and data collection services, certified to ensure the system works consistently. …the Government could contract the tax collection function to private companies, with competition driving down administrative costs. Government would provide oversight and certification of private sector providers to ensure fairness.”

I agree completely.

On the way to the explanation, he points out a few things worth thinking through. I cherry-pick a few:

“Last month the (US) federal government announced a sizeable increase in the corporate average fuel economy (CAFE) standards for new vehicles, bumping the required average of 35.5 miles per gallon in 2016 to 54.5 miles per gallon by 2025. …this policy will have a devastating impact on highway funding if US Congress does not take corresponding action to identify revenue not based on fuel consumption.”

“…some cars on our streets already contain much of the technology to meet the new CAFE standards. Fuel efficiencies of many hybrid electric vehicles are approaching 50 miles per gallon and steadily raising the fleet averages. Now entering the marketplace are fully electric and plug-in style hybrids - Nissan's LEAF and Chevrolet's Volt, among others. Every major automobile manufacturer is preparing at least one electric, plug-in hybrid, or advanced hybrid model for market entry in the next two to three years.”

“These vehicles, capable of nearing or exceeding the calculated equivalent of 100 miles per gallon, will generate little fuel tax. It is estimated the entire fleet will need about 40% of the fuel it currently consumes, reducing tax revenue by about two-thirds.”

Increasing the fuel tax “would create an ever-widening inequity between owners of highly fuel efficient vehicles and those [that] pay a far heavier burden by continuing to operate conventional cars.”

“Alternative funding sources must be found to maintain the health of highway systems… Policymakers have considered replacements for the fuel tax, such as sales taxes, registration fee increases, personal or real property taxes, income tax, value-added tax, tolling high capacity highways, taxes on oil company profits and others.”

“But each shifts the burden of paying for the roads from one type of user to another or to non-users. In almost all of these cases, the proposed alternatives are less equitable than the current system.”

“The fuel tax is based on use, but its consumption linked formula is woefully out of date and not correctable.”

“Since two congressional commissions on transportation funding endorsed VMT as the most viable alternative to the fuel tax in 2008 and 2009, the US has done little to advance the discussions.”

The net of this is that in the next few years the structure of road-use funding via fuel taxation will remain unchanged and this will boost sales of alternative (non-fossil) vehicles, whereas shifting from fuel-tax to road-use fees now would dampen those sales. This is one case where government inability to act may have a partially-positive outcome. Although, Oregon might prove an exception.

Perhaps we should shelve the discussions about VMT tax and Mileage-based User Fees for a few more years. Technology will soon drain so much revenue from our highways and roads that a future government will have little choice, anyway.

Spying on your life or saving your life?

Over in AutoSavant you can enjoy a dose of scare mongering about a device to meter driver behavior for PAYD insurance.  Any device that monitors, views, films, captures, measures, listens, collects, or sniffs data about anything humans do seems to be fodder for phobic journalism and paranoid commenters. PAYD insurance indeed has privacy issues.  But they are addressable.

The real reason for PAYD insurance is to distribute risk more fairly for drivers and more manageably for insurance companies (right now your zip code is used (among other things) to help assess your risk profile). In addition to tentatively threatening privacy and increasing affordability for more than 50% of drivers, PAYD insurance also enhances safety, and reduces vehicle miles traveled (VMT).

Unfortunately, instead of discussing privacy, cost, safety and VMT in a balanced fashion (which I would say should be about 5%, 25%, 50% and 20% respectively, this journalist weighed these four matters at 90%, 10%, 0% and 0%. This is to do a huge disservice to his readers.

When I read the article there were 39 comments. 54% were against the PAYD device (stoked by the writers privacy fears), 28% were for the device for reasons of fairness, safety or cost savings and 18% were neutral or incoherent. Statistically speaking, these 39 commenters are somewhat smarter than the journalist (usually only extreme opinions show up in these open forums).

~~~

Technology has been extending average life spans for many hundreds of years. Medical advances (e.g., near-mandatory vaccination programs) come to mind. Not long ago, seat belts were considered an invasion of privacy, now a majority of us put them on without thinking about it. Tonight I was stopped in a mandatory alcohol check-point. I was asked if had anything to drink this night. Was that an unfair imposition on me? (I drink a glass of wine once a month and had none this night.) I have been twice sniffed by narcotics detection dogs while in airports.  Another privacy invasion?

Driving safer saves lives. About half of the victims of road accidents were driving comparatively safely. Progressive's program may save opt-ins a couple hundred dollars, and it also saves lives. Anyone with a family member killed by another driver would applaud this form of insurance; many with a family member who has killed someone in an accident might also consider this a good idea. 15 years ago I had a brother-in-law who took his own life a few weeks after killing someone in an auto accident.

Compare how many Americans have been entrapped in a legal matter unrelated to road use with evidence provided by tolling data or automotive insurance data vs how many innocent Americans are disabled or dead because of automobile accidents.

A similar product to Progressive’s, available in Australia, (betterdriver dot com dot au) promises to save teen lives. Here the party watching is the teen’s parents. Big Daddy if not Big Brother. Fewer complaints, it seems, because they are our kids.

The key issue is NOT the metering of driving behaviour, it is the USE of that data. There must be strong, and strongly upheld, legislation that this data only be used for the purpose of fair insurance pricing and safety. The readers who comment: “you are being monitored” may be right, but it is not the monitoring that is harmful, it is the potential for abuse. We need to address the potential for abuse, rather than reject a powerful tool for automotive safely.

Fuel Tax vs Property Tax

Why do we to pay two taxes for roads?

One of the most common objections to VMT charging or mileage-based user fees is “I already pay (for roads) with fuel taxes”. While I have heard or read this many hundreds of times, I have never heard anyone complain, “I already pay (for roads) with property taxes.”

It is interesting that we are so very sensitive to (or aware of?) of fuel tax, but not so much to property tax. And why do we pay two taxes for our roads, anyway?

A 2009 article from Access Magazine explains this neatly.

Early in the 20th century most US “…cities had the technical and financial means to widen their streets, install traffic signals, and carry out other operational fixes. But they lacked the means to shoehorn extensive freeway systems into dense urban areas. One problem was that the tax instruments available to local governments were not appropriate for the task. Local governments had the authority to levy taxes and special assessments on property and businesses, but not, for example, on fuel. The property tax is a sensible mechanism for financing local streets and roads, because these streets link individual land parcels to the world and help give them value. It is thus logical for property owners to help pay for local street construction. Freeways, however, affect the value of property across the entire metropolitan area, not just of nearby parcels. This makes it hard to justify special assessments on freeway-adjacent properties, since the majority of a freeway’s benefits accrue to travelers and landowners over much larger areas. (Indeed, being too close to a freeway can lower land values, particularly for residential property.) … A potential solution to these problems emerged in the 1920s with the development of the gas tax. As a way to finance freeways, gas taxes had much to recommend them: they placed the tax burden on users of the system, they were relatively easy to administer and collect, and they were robust. Property tax revenues nationwide plummeted 72 percent during the Depression years of 1930 to 1939, but fuel consumption and its associated tax revenues proved surprisingly resilient. Except for a small dip at the beginning of the Depression, fuel consumption rose every year until World War II (emphasis mine).

So a fuel tax was indeed a valuable innovation 100 years ago. It would remain a valuable innovation if the purchasing power of fuel tax were consistent with the needs of building and maintaining roads. But it is not. As fuel economy improves, as the purchasing power of the road building and maintenance dollar shrinks, and as we refuse to increase the fuel tax, its efficacy continues to wane. And that is only half the problem with the fuel tax. It also does not respond to congestion.

And while the property tax is also insensitive to congestion as a pricing signal, its correlation with road use is even more tenuous than is the fuel tax. This makes it less fair than fuel tax—since a young renter who contributes to her landlord's property tax payment and who does not use a car overpays for road use.

So we have two taxes that are ineffective in managing demand, one of which we cannot adjust and the other of which we seem to have minimal awareness of. While mileage-based user fees could solve both problems given the right policy design, we seem particularly attached to a status quo that is unable to give us the roads we need, and that increases congestion.

Our attachment to a tax structure that is keeping in place a very serious problem for both inter-urban and intra-urban mobility is critically bankrupt and a huge barrier to solving congestion and its attendant ills.

Collaborative Telemetrics

If Rachel Botsman and Roo Rogers are right in their recent book “What’s Mine is Yours: The Rise of Collaborative Consumption”, we can expect a rise in peer-to-peer car sharing.  P2P car sharing turns any owner of an automobile into a single-car car-rental company, with reservation services provided online. Right now one of the US operators, RelayRides out of Cambridge Mass, installs technology to lock and unlock the vehicle using a near field communication card that the renter-member keeps in her purse meaning that key-exchange does not require owner attention. That’s a start.

Traditional car-share operations such as ZipCar, lower automobile ownership, reduce demand for parking space, reduce automotive miles traveled, and likely reduce traffic congestion in peak times. P2P car sharing offers all these things—and more. VMT supply can be increased dramatically without investing in more vehicles, car owners can have their neighbors make their car payments for them, it can make a greater variety of vehicle sizes and types available to a car share renter, and the vehicle storage depot problem mostly goes away.

While traditional car sharing has economic incentives for people who only need occasional access to a vehicle, P2P carsharing has economic incentives for car owners. This is disruptive, making it something to watch. 

Wikipedia lists 13 P2P car share operators world-wide—with the 1^st launch in Germany in 2001. Half of these launched or are launching in 2011. Tellingly, one of the founders of ZipCar, Robin Chase, is also the founder of Buzzcar a P2P service in France. I predict 100s of these will be set up in as many cities and only after we figure out how to do it will the market pick a handful of winners.

The key to P2P carsharing work is trust. You need to trust that my car will be clean, safe and operational and I need to trust that you will respect my property. Trusting strangers from whom you might buy something is well-managed with online purchasing from auction sites like eBay or the used book jobbers that trade on Amazon. If you rent your car online—as you would if you were a car owner in a P2P car-share transaction—your reputation (well, your car's reputation) will be gleaned from your users by the site that manages the transaction. But what about the renter's reputation? After all, you will not want your car to be subject to automatic speeding or red-light tickets and parking fines. How will you know if a renter abuses your accelerator or clutch?

There's other things such as insurance and perhaps wanting a different rate from someone who uses your car for two hours to drive a hundred highway miles vs someone using the same two hours to drive just couple of miles to visit his auntie.

Telemetrics systems can address all of this. An in-car meter that measures speed, braking, steering could automatically establish a driver’s reputation for the car owner. While there is no need to track the driver, “driver-style can be calculated as a reputation factor and the car owner can decline or accept further rental requests based on that reputation. While we are at it, the same meter can manage distance traveled, usage-based insurance, even parking payment, bridge or tunnel tolls, and so on.

What is now possible is for P2P car share operators to equip a member’s vehicle with a meter sufficient to calculate the entire trip cost on an equitable usage basis for automatic billing and permit the car owner to select driver style thresholds, so that she need not be concerned with any of these matters.

Collaborative Telemetrics could make P2P carsharing the “Killer App” of 21^st century automobility.

Fair to the poor

The Greater Toronto Area has experienced a noticeable increase in all-day conferences and hefty consulting reports about road pricing and infrastructure funding. A decade ago it was once every few years. Now it’s monthly. Each of these conferences and reports carry the same message–our transportation infrastructure is inadequate, crowded and crumbling. And our purse is empty. While this is true of large cities more often than not, Toronto has it worse than many—Toronto’s population is growing especially rapidly and we have not invested at the rate we should have over the past quarter century.

Reaching Top Speed, a June 2011 report from the Toronto Board of Trade points out that the full bill to refurbish and operate transportation infrastructure in the GTA over the next 25 years—$100 billion, before overruns—is a figure 22% greater than the combined cost of the Big Dig, the Chunnel and the Three Gorges Dam.

This same report identified several “funding tools” the top five of which were road pricing, congestion pricing, fuel tax, regional sales tax, and parking surcharges. These lean heavily toward fees on automotive use, although the rebuild is heavily transit oriented. The report suggests that these could raise $1 billion per year–or about half of the capital expense required for the 25-year plan.

There are important differences among the five tools listed. The most effective for managing gridlock is congestion pricing; the least effective is the sales tax. Congestion pricing is politically the most incendiary; the least is likely sales taxes or parking surcharges. But the touchiest subject is fairness. Among these, congestion or road pricing is often said to be unfair to lower income families.  But is road pricing worse than a sales tax for poorer families?

This problem was looked at recently by Lisa Schweitzer fromUSC and Brian Taylor from UCLA (Access, Spring 2011), albeit in the context of pure road funding. As we choose amongst funding tools, we should weigh their observations.

As a funding mechanism, sales taxes are collected pennies at a time and hidden in many transactions making it virtually impossible to see what one is paying for roads. Sales taxes make the poorest households worse off since the people in these households are paying something while driving little—certainly much less than people from richer households. This makes increasing regional sales taxes to fund roads doubly regressive.

Road use fees, which can be made fully transparent, take money from only those that use the roads, i.e., mostly middle- and higher-income families. Schweitzer and Taylor find that switching from tolls to sales taxes shifts the burden from users to non-users and away from middle-income people onto both the rich and the poor–i.e., road tolls are better than sales taxes for the lowest-income families (although they increase pre-existing access barriers).

How any of us pay for good urban transportation is a very complex social issue—hence the burgeoning industry in conferences and consultant reports, and the dearth of workable solutions.